The problem with our economy ...

[kentuck]

As everyone looks for a scapegoat, as the stock market declines and Wall Street panics, as the politicians grasp for political advantage, the average middle and working-class American looks on in amazement.

Many blame the sub-prime mortgages that were given to minorities as the cause of the problem. They rant about ACORN and the failure of poor Americans to manage a mortgage. However, according to Marcy Kaptur on C-SPAN the other morning, over 75% of these sub-prime mortgages are healthy and viable.

The problem lies elsewhere. From my personal observations and experiences, the housing bubble had much more to do with the middle and upper class, rather than the poor working class. They made a lot of money in the roaring '90's and they were looking to move up in status.

With both parents working and making good money, they bought houses they thought they could afford. Many then lost their jobs and started relying more and more on their credit cards and borrowing from their 401K's in order to survive. Eventually, the 401K's disappeared and their credit cards maxed out. They reached the point of no return. They could no longer afford their credit cards and their mortgages. They had to foreclose or file bankruptcy or both. This was primarily a middle-class problem with homes valued from $250,000 to $500,000 dollars.

All the while, their banks were selling and leveraging their mortgages from one bank to another and created all types of clever schemes to keep the money flowing. However, nothing was being created. There was no wealth involved. It was all on paper.

And the fact that there was no wealth created gets to the heart of the problem with our economy. Since NAFTA and before, our manufacturing jobs have been shipped out of this country. Even our shoes and clothes are made overseas. The only thing that we now produce are weapons and fighter jets. The military has become our largest exporter.

Meanwhile, Congress raised the minimum wage to $6.00. The majority of jobs in our present economy range from $8 to $12 dollars an hour working in some sort of customer service industry. There is no money to buy anything because the dollar has declined to the point that all these folks are struggling to stay out of a Third World existence.

There are no good jobs in this country in any large numbers anymore. We produce nothing. And when the producer names the tune, the consumer does the dance.

It is the decline in the union movement and good pay that has contributed to the situation that we now face. Until we can once again produce good jobs and until the worker can get a larger share of the productivity that he has created in this country, we will continue to slide further and further into the hole of depression and Third World status.

The culprit, if we could investigate in the darkest corners, would be the credit card industry. They are more to blame for the foreclosure problem than any other single entity. Individual credit card debt led to the present catastrophe on Wall Street as well as Main Street. It is that plastic that connects the entire problem we now face.

[2speak]

1. Good post!

[Virginia Dare]

2. Too much debt, bottom line...n/t

[raccoon]

3. I haven't seen any stats, but IMO that IS the majority, and with no benefits.

"The majority of jobs in our present economy range from $8 to $12 dollars an hour working in some sort of customer service industry."



"There are no good jobs in this country in any large numbers anymore."

That's a big 10-4.

[TwixVoy]

6. Part of the problem is also

the job requirements for many jobs are also completely bogus these days.

For example, at the retailer I work at most management positions require a 4 year degree. As one of the retail managers at our stores I can tell you just about anyone could do this job with ZERO college. Yet we have people getting in to massive debt getting a college degree, and then starting out making 37K a year for a job that supposedly one must have a degree in order to do.

Basically getting in to debt is accepted and expected even for an education.... and even when that education is going to land you a job that will barely be able to pay that debt back.

[Indenturedebtor]

4. Yes. It really is that simple folks. Republinomics are the FAIL n/t

[OakCliffDem]

5. It looks like the Trickle Down has dried up

[Cessna Invesco Palin]

7. The culprit is the unregulated derivatives market, brought to you...

...courtesy of the Republican party and its various enablers. Every other Western capitalist society contains all of the elements you're complaining about to varying degrees, and somehow none of their economies are collapsing, except with respect to the areas where they have significant exposure to the American crisis.

[kentuck]

8. The middle class is shrinking...

Greed and the thirst for more profits and more dividends has benefitted a certain class of our society as the majority's standard of living has declined. Just as Henry Ford knew that he had to pay his workers enough to buy the cars they were making, today's capitalists seem to have forgotten that basic lesson of capitalism. If people cannot make enough money to buy the goodies and their credit has maxed out, then the marketplace will shrivel up and die. Those are the symptoms we are presently experiencing.